ACFE Report Provides Insights on Occupational Fraud in the U.S.

Corruption, Billing Schemes Most Common Among Fraud Cases in Survey

June 24, 2010 - AUSTIN, Texas--The median fraud loss for U.S. organizations is $105,000, according to a survey of Certified Fraud Examiners (CFEs) who investigated cases between January 2008 and December 2009. The study found billing and corruption schemes were the leading types of fraud reported in U.S. cases and others throughout the world.

The Association of Certified Fraud Examiners (ACFE) published the results of the survey in its highly-anticipated 2010 Report to the Nations on Occupational Fraud & Abuse. For the first time, the Report includes global data among the 1,843 cases of fraud that were studied.

Information from CFEs in 106 nations was compiled to develop the benchmarking statistics on occupational fraud losses, detection methods and perpetrators. Since 2002, the biannual Report has evolved and been modified to continue to draw more meaningful information from the experiences of CFEs and the frauds they encounter.

Key findings from the 84-page Report include:

Fraud schemes among U.S organizations are costly. Among the 1,021 U.S. cases in the study, the median fraud loss was $105,000. Billing schemes were present in 27.6 percent of these cases, while corruption was reported in 21.9 percent of cases. Fraud committed from the top of an organization is the most damaging. While a large percentage of U.S. frauds in the study were committed by lower-level employees (46.2 percent) and caused a median fraud loss of $50,000 it was frauds committed by owners/executives (17.1 percent) that did the most damage with a median loss of $485,000. Frauds committed by managers (36.7 percent) had a median loss of $150,000. A slight gender gap still exists in U.S. fraud cases. More than 57 percent of the U.S. frauds in the study were perpetrated by males. However, this gender gap is narrower than what was found in cases from most other regions in the world, most notably Asia (86.7 percent male) and Europe (82.1 percent male). More frauds are detected by tip than by other means. In a trend reflected worldwide, the impact of anonymous fraud hotlines is clear, as 37.8 percent of the U.S. frauds in the study were detected by tip, followed by management review (17.1 percent) and internal audit (13.7 percent). The Report also details findings such as how organizations were affected based upon industry, how the implementation of anti-fraud controls affected exposure to fraud, additional breakdowns of fraud statistics by geographical region and the most common behavioral traits observed among fraud perpetrators.

The 2010 Report to the Nations is available for download online at the ACFE’s web site: ACFE.com/RTTN. The Report is in PDF format.

The first Report to the Nation was published by the ACFE in 1996. The ACFE has published subsequent editions in 2002, 2004, 2006, 2008 and now 2010. Over that time, the Report has come to be regarded as the most authoritative statistical resource available on occupational fraud.

About the Association of Certified Fraud Examiners The ACFE is the world's largest anti-fraud organization and premier provider of anti-fraud training and education. Together with more than 50,000 members, the ACFE is reducing business fraud world-wide and inspiring public confidence in the integrity and objectivity within the profession. For more information, visit www.ACFE.com.